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Pebblebrook Hotel Trust PEB

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Delays to Business and Group Travel Create an Attractive Opportunity to Invest in Hotel REITs

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

Fundamentals across the hotel industry rapidly declined at the outbreak of the coronavirus pandemic, as many travel plans were canceled. The hotel REITs saw portfolio EBITDA go negative in 2020, leading to share prices quickly falling. After development of a vaccine in November 2020, leisure travel began to return to prepandemic levels, with the economy and midscale hotel segments returning to 2019 levels by the summer of 2021. However, business travel still remains low, as there is little reason for office workers to travel while many businesses are keeping employees home. Additionally, large organizations need to plan conventions months to years in advance, so the pandemic is creating a high level of short-term uncertainty about the safety of gathering indoors and delaying the return of group bookings. With the hotel REITs owning mostly upper-upscale hotels, which have a high exposure to business and group travel, the hotel REITs have reported revenue per available room growth below the U.S. hotel industry average.

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Company Profile

Business Description

Pebblebrook Hotel Trust currently owns upper-upscale and luxury hotels with 13,235 rooms across 53 hotels in the United States. Pebblebrook acquired LaSalle Hotel Properties, which owned 10,451 rooms across 41 U.S. hotels, in December 2018, the company current Pebblebrook CEO founded in 1998, though management has sold many of those hotels over the past few years. Pebblebrook's portfolio consists mostly of independent hotels with no brand affiliations, though the combined company does own and operate some hotels under Marriott, Starwood, InterContinental, Hilton, and Hyatt brands.

4747 Bethesda Avenue, Suite 1100
Bethesda, MD, 20814
T +1 240 507-1300
Sector Real Estate
Industry REIT - Hotel & Motel
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 53